#1
What does the acronym SKU stand for in inventory management?
Stock Keeping Unit
Sales and Keeping Unit
Supply Key Unit
Stock Keeping Utility
#2
Which of the following is not a component of the ABC analysis method for inventory control?
High-value items
Medium-value items
Low-value items
Shortage analysis
#3
What is the primary objective of inventory management?
To maximize sales revenue
To minimize the cost of holding inventory
To minimize ordering costs
To minimize sales returns
#4
Which inventory management technique involves grouping items based on their value and managing each group differently?
FIFO (First-In, First-Out)
LIFO (Last-In, First-Out)
ABC analysis
Economic Order Quantity (EOQ)
#5
Which of the following inventory management models assumes constant demand and no variability in lead time?
Economic Order Quantity (EOQ)
Just-In-Time (JIT)
Material Requirements Planning (MRP)
Reorder Point (ROP)
#6
Which of the following is a method for inventory valuation?
FIFO (First-In, First-Out)
LIFO (Last-In, First-Out)
Average Cost Method
All of the above
#7
What is the formula for calculating inventory turnover ratio?
Cost of Goods Sold / Average Inventory
Average Inventory / Cost of Goods Sold
Sales / Cost of Goods Sold
Cost of Goods Sold / Sales
#8
Which accounting principle states that inventory should be recorded at the lower of cost or market value?
Conservatism Principle
Matching Principle
Consistency Principle
Materiality Principle
#9
In the context of inventory management, what does the term 'Lead Time' refer to?
The time it takes for inventory to be delivered after an order is placed
The time it takes for inventory to be produced
The time it takes for inventory to be sold
The time it takes for inventory to expire
#10
Which of the following inventory costing methods results in a higher net income during periods of rising prices?
FIFO (First-In, First-Out)
LIFO (Last-In, First-Out)
Weighted Average Method
Specific Identification Method
#11
Which inventory costing method assumes that the cost of the latest inventory purchased is the cost of goods sold?
FIFO (First-In, First-Out)
LIFO (Last-In, First-Out)
Average Cost Method
Specific Identification Method
#12
What does the Economic Order Quantity (EOQ) represent in inventory management?
The quantity of inventory that minimizes total inventory holding costs and ordering costs
The maximum level of inventory a business can hold
The minimum level of inventory a business should maintain
The quantity of inventory a business must order to meet demand
#13
What is the purpose of safety stock in inventory management?
To prevent stockouts caused by unexpected fluctuations in demand or supply
To reduce holding costs associated with excess inventory
To optimize inventory turnover ratio
To increase the lead time for inventory replenishment
#14
What is the impact of carrying a high level of inventory on a company's financial performance?
Increases profitability
Decreases liquidity
Reduces risk
Increases asset turnover ratio
#15
Which of the following is an advantage of using RFID technology in inventory management?
High initial investment cost
Requires line of sight for scanning
Can track inventory in real-time
Limited data storage capacity